Take a look at value-added programs to increase value of calf crop
There are many ways to add value to a calf crop to make them worth more at market. Clint Berry, a fifth-generation cattleman and Superior Livestock representative, was part of a webinar with the Texas and Southwestern Cattle Raisers Association on April 18 to discuss value-added programs.
Most of these programs are either export access programs – to help cattle become eligible for export to foreign markets – or internal domestic product programs to make cattle more valuable in branded programs in the U.S.
There are many of these branded programs today, including Country Natural Beef, Certified Angus Beef, Certified Hereford Beef and dozens of companies which warrant specific requirements producers must follow.
“The easiest way to describe how most of these work is like stair steps. To climb up the ladder, a person has to climb on to steps one, two, etc. They can’t go from the ground floor to step five without the other steps,” Berry explains. “These value-added programs work the same way.”
However, Berry also recognizes every operation is different and what fits one outfit won’t necessarily fit another.
“In the cattle market, it’s not uncommon to see a $25 to $50 per hundredweight (cwt) difference in prices for a variety of reasons. On the Superior website, there is a lot of information, including market reports, archived catalogs, value-added programs, etc. This can be a quick reference for buyers,” he says.
“These include vaccination protocols, management, including the weaning status of the cattle and various value-added programs. One program even tells where the producers purchase their bulls. This will be written in the details of the contract as well,” he adds.
Examples of value-added programs
Berry explains every other year Superior has Kansas State and Merck Animal Health evaluate data.
“They go through it all and try to differentiate what the factors are affecting sale price,” he states. “Some are not traditionally called value-added programs, but it’s important to understand the foundation for them is laid at the management level.”
“The Vac34 and Vac34+ in one instance was adding $4.50 per cwt to the value of cattle, compared with a Vac24. What we call a Vac24 is a bawling calf that has had one round of shots, including a five-way modified live vaccine with a seven-way or higher clostridial like blackleg, with at least one pasteurella vaccine,” he adds. “The pasteurella can be in a combo or as a stand alone. Our minimum criteria is a Vac24 for a baseline.”
Superior does not sell any non-vaccinated calves, and Berry notes their buyers expect calves to come with documented vaccinations.
“The Vac34 has two rounds of the shots, which I previously mentioned,” he says. “They are still bawling calves, but they had one round of shots while they were still a small calf on the cow and another round two to four weeks prior to shipping. Some people call this preconditioning.”
“The Vac45 and Vac45+ shows $8.60 per cwt over the Vac24. It’s the same shot requirements as the Vac34, but the calves are 45 days weaned, minimum,” Berry explains. “On our data, on nearly four million head over the last two years, this was over and above the calves which just received one round of shots and were bawling off of the cow.”
There are other value-added incentives like Beef Quality Assurance (BQA) certification, which Berry points out has become a requirement for some added-value programs.
Heifers versus steers
Additionally, Berry addresses the difference between selling steers and heifers, which, on average, leads to a $19 difference per cwt.
“This sounds like a lot, but if a producer is feeding heifers, there is a drastic difference,” he says. “There is no difference genetically between steers and heifers, but heifers are an inferior feeding animal, mainly due to lower feed conversion.”
Berry explains, due to genetics and management, carcass quality will typically be equal between steers and heifers, with heifers grading just as well or better than steers. However, females don’t convert as well, so the cost to put pounds on a heifer is higher.
“And, in general, most heifers weigh about 100 pounds less at harvest compared to steers. This is why it’s not uncommon to see heifers bringing $10 to $20 less than steers, unless they are replacement heifers,” he says.
Marketing strategies
“When thinking about marketing strategies, I look at value-added programs a lot like a railroad track,” Berry says. “People can walk on the left or right side of a track and they will be fine. But, if they walk down the middle of the track, sooner or later they will get run over.”
“For the most part, if a producer decides to go the natural route and take away some of the science and technologies to add production efficiency – pounds, feed conversion, etc. – they have to enroll and have opportunity to capture some of the premiums for those third-party evaluated programs,” he continues.
Conversely, Berry says producers might take the other approach, raising what is considered “conventional cattle” and benefiting from the use of implants, antibiotics and ionophores.
“Some producers don’t know which way to go so they spend all of their time in the middle, and they miss out on both ends. They either lose out on added pounds or on the opportunity for premiums,” he states. “In my opinion, this is the only wrong decision.”
Therefore, Berry encourages producers to look at their production model and ask themselves what works, what minor changes they could make and how aggressive they want to be.
“Will they take easy pounds with implants or go the other route?” he asks.
“Don’t remove science and technology without stepping in to the audited side where they can market those cattle and capture the premium. When walking down the middle, they lose on both ends,” he concludes.
Heather Smith Thomas is a corresponding writer for the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
